Metro health department pays back $50,000 in grant money

A program to improve children's health was so riddled with questionable expenses that the Metro Health Department had to pay back more than $50,000 in grant money. The Channel 4 I-Team discovered the health department employee who oversaw the grant also served as an officer on the board of the agency that received the grant money.

An audit by the state found the Metro Health Department spent thousands of taxpayers' dollars on an expensive event, public relations, high-end computers and a questionable payroll, and that there was a lack of oversight of the program.

The Metro Health Department contracted with a Nashville non-profit called National Step Show Alliance to teach step dancing to Metro middle school children. The grant money came from the state as part of a program to fight obesity and diabetes.

"I feel like it could have been better. It needed to be better," Paul said. An employee working under Dr. Paul was in charge of the grant.

"Yeah, there were things that were purchased that he should not have signed off to be reimbursed," he said.

The grant money was paid to the National Step Show Alliance, or NSSA.

The state said Metro should not have reimbursed NSSA for gift cards and meals totaling more than $4,000; $11,000 in expenses to put on a step show event, including photography, sound system rental, and making show DVDs.

The grant also paid for an Apple computer worth more than $3,300 as well as a $928iPad.

Auditors also questioned $8,000 worth of salaries they said were submitted on duplicate time sheets, each with different hours. Both time sheets were paid.

The Health Department's board is not very happy.

"We have a management problem," said board chairman Bill Hance. "There was no oversight. I can speak for the board, we're very concerned."

The I-Team also discovered that the health department employee in charge of overseeing the grant, Warren Isenhour, also served as the treasurer for the agency receiving the grant money, the National Step Show Alliance.

The I-Team asked Dr. Paul, "Are you aware that he's a board member of the organization?"

"He is a board member of the organization? No, I wasn't aware of that," Dr. Paul said.

We asked if he considered that a problem.

"I do," Dr. Paul said. "That's a conflict of interest."

But it turns out, Dr. Paul has been aware of the conflict of interest for nearly a year.

The I-Team obtained an internal health department email copied to Dr. Paul showing that in November 2012, Metro's Legal Department said the conflict "will need to be disclosed."

After our interview with Dr. Paul, he emailed us a statement saying " ..after refreshing my memory about Step Up, I realize I was notified of Warren's conflict of interest in being on the NSSA board."

In spite of all this controversy and mismanagement, no one from the Metro Health Department was ever fired.

Isenhour was laid off in September, more than six months after the Metro Health Department had to reimburse the state $50,000.

Dr. Paul says the important thing is to build systems to catch things like this in the future.

"It's kind of like when there's a train wreck. A lot of people want to point fingers, and you want heads to roll. But the National Transportation Safety Board really is trying to figure out how you stop the next one from happening," he said.

Channel 4 asked, "Wasn't this a train wreck due to staff not doing their job?"

"Well, this was due to staff not doing their job because we didn't put them in, we didn't give them proper training, we didn't give them the proper systems of oversight," he said.

"It says to me, nobody was watching it," said Hance.

The I-Team contacted Warren Isenhour, who said he doesn't think he had a conflict of interest. He says he resigned from the Step Alliance board while overseeing the project at the health department.

It's important to note that the state health department - that's who gave Metro the grant money - says there are no allegations that anyone stole any money.

There were a lot of questions about how the money was spent and about oversight of the program.